Salmond faces taxation pressure

Mr Salmond said Scotland must have a "new, fairer and better system" of funding local authorities.

Scots Tory leader Annabel Goldie said the change would leave local government with an annual £1bn funding shortfall.

Speaking during First Minister's Question Time, she said it was "unlikely" the proposal would be approved by parliament.

The SNP's local income tax proposals have been opposed by Labour, the Liberal Democrats, Greens and Conservatives.

"I believe that we need a new fairer and better system, called the local income tax"
Alex Salmond
First minister

The Lib Dems want individual councils to be able to vary local income tax, as opposed to the SNP's fixed 3p levy across Scotland.

Miss Goldie said local government finance was a "thistle which needs to be grasped", claiming SNP plans would "drive a coach and horses through local autonomy and local democracy".

She said: "If in the unlikely event that the first minister gets that proposal through this parliament, can he tell me even approximately when this new system will hit Scotland?"

Mr Salmond said his government's policy was based on people's ability to pay, which was a central feature for justification of any taxation system.

"The difference between us, I suspect, is that she believes we can amend the current unjust, iniquitous system," said the first minister, who added that he had difficulty with Tory proposals to halve council tax bills for those aged 65 and over.

"I believe that we need a new fairer and better system, called the local income tax."